Evening Report | August 29, 2023

Check our advice monitor on ProFarmer.com for updates to our marketing plan.

EPA, Army Corps amend WOTUS rule... EPA and the Army Corps of Engineers announced the final rule amending the 2023 definition of “waters of the United States” (WOTUS) to conform with the recent Supreme Court decision in Sackett v. EPA. The agencies have amended key aspects of the regulatory text to conform it to the Court’s decision. The conforming rule will become effective upon publication in the Federal Register.

The new final rule states Waters of the United States mean:

• Waters which are: 1) Currently used, or were used in the past, or may be susceptible to use in interstate or foreign commerce, including all waters which are subject to the ebb and flow of the tide; 2) The territorial seas; or 3) Interstate waters.

• Impoundments of waters otherwise defined as waters of the United States under this definition, other than impoundments of waters identified.
• Tributaries of waters identified as relatively permanent, standing or continuously flowing bodies of water.
• Wetlands adjacent to relatively permanent, standing or continuously flowing bodies of water and with a continuous surface connection to those waters;
• Intrastate lakes and ponds, streams or wetlands that are relatively permanent, standing or continuously flowing bodies of water with a continuous surface connection to the waters.

Eight exclusions from the definition of “waters of the United States” are codified. “Adjacent” is defined as “having a continuous surface connection.”

Click here for full details.

Perspective: Predictably, the agencies did the bare minimum. They got rid of the significant nexus test and they also said interstate wetlands are not interstate waters.

AFBF, NCBA comment on new WOTUS definition... American Farm Bureau Federation (AFBF) President Zippy Duvall made the following comments on the revised WOTUS rule: “EPA had a golden opportunity to write a Waters of the U.S. Rule that’s fair to farmers and stands the test of time, but instead chose to continue government overreach and revise only a small slice of the rule that was rejected by the Supreme Court. We’re pleased the vague and confusing ‘significant nexus’ test has been eliminated as the Supreme Court dictated. But EPA has ignored other clear concerns raised by the Justices, 26 states and farmers across the country about the rule’s failure to respect private property rights and the Clean Water Act. Farmers and ranchers share the goal of protecting the resources they're entrusted with. They deserve a rule that respects farmers as partners in that effort.”

National Cattlemen’s Beef Association (NCBA) Chief Counsel Mary-Thomas Hart said, “The entire cattle industry breathed a sigh of relief when the Supreme Court curtailed the EPA’s overreach under the Clean Water Act. Today’s revised WOTUS definition is an important step toward bringing the EPA more in line with the Supreme Court’s ruling. NCBA looks forward to working with the agency to protect farmers and ranchers from burdensome regulations and provide them with lasting certainty on WOTUS.”

Canadian wheat production estimated lower than expected... Statistics Canada estimated Canadian all-wheat production at 29.5 MMT, down 14.2% from last year and 900,000 MT lower than the average pre-report estimate. The decrease is due to lower yields, which are expected to fall 18.6% to an average of 41.2 bu. per acre due to dry conditions across the Canadian Prairies, offsetting higher anticipated harvested area, which is expected to rise 5.6% to 26.3 million acres.

The anticipated decrease in total wheat production is largely attributable to spring wheat, which is expected to fall by 14.5% to 22.1 MMT. Spring wheat yields are anticipated to fall 19.9% to 42.6 bu. per acre, while harvested area is expected to increase 6.9% to 19.1 million acres.

Canadian canola production is estimated at 17.6 MMT, down 6.1% from last year but 200,000 MT above expectations. The anticipated decrease in production is due to lower yields, which are expected to fall 8.8% to 35.4 bu. per acre, while harvested area is expected to increase 3.0% to 21.9 million acres.

Mike Jubinville of MarketsFarm said, “StatCan’s canola production number still might be a little high in our view as a good portion of this year's increase was primarily in the southern and central growing regions, which should pull yield estimates lower still. I was thinking total wheat crop around 30.0 MMT; the spring wheat portion around 22.5 MMT. But I’m willing to accept StatCan’s estimates.”

El Niño poised to impact global food prices... The El Niño weather phenomenon will exacerbate the effects of India’s rice export ban and Russia’s withdrawal from the Black Sea grain deal, according to the Financial Times. Expected to start in September, El Niño will bring extreme heat to parts of South Asia and Central America, as well as heavy rainfall to the Andes. This event typically disrupts crop cycles, adding strain to food output and prices, especially after India halted non-basmati white rice exports and Russia affected Ukrainian grain terminals. These three shocks could lead to higher inflation expectations in emerging markets, where food constitutes a larger portion of consumer spending compared to developed economies. As a result, central banks in these countries might need to maintain higher interest rates for longer, potentially leading to market volatility. The moves by India and Russia are already affecting global food prices, as seen in the United Nations’ FAO food price index. In Europe, a colder winter caused by El Niño could lead to increased demand for liquefied natural gas.

EU wheat exports running well behind year-ago... As of Aug. 27, European Union 2023-24 wheat exports totaled 4.49 MMT, 1.82 MMT (28.8%) behind the same period last year, according to data from the European Commission. Romania was by far the biggest EU wheat exporter so far in 2023-24 at 1.26 MMT, followed by Poland at 928,000 MT, Bulgaria at 877,000 MT, France at 766,000 MT and Germany at 445,000 MT. The commission didn’t give a reason for the much slower start than the previous marketing year, though it is tied to strong shipments from the Black Sea region, especially Russia.